On the General Impossibility of Persistent Unequal Exchange Free Trade Equilibria in the Pre-industrial World Economy
Soh Kaneko () and
Naoki Yoshihara ()
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Soh Kaneko: Oita University
No SDES-2018-19, Working Papers from Kochi University of Technology, School of Economics and Management
This paper analyzes the persistency of the unequal exchange of labor (UE) in international trade. An intertemporal model of a world economy is defined with a leisure preference and no discount factor. Every incompletely specialized free trade equilibrium is characterized as having non-persistent UE, which verifies the convergence of economies without relying on economic growth or diminishing returns to scale. In particular, it characterizes a subclass of equilibria in which the sequence of real interest rates does not converge to zero, but UE tends to disappear while equivalently the distribution of capital assets tends to be equalized in the long run.
Keywords: Unequal exchange of labor; a world economy with a leisure preference; non-stationary relative prices of commodities (search for similar items in EconPapers)
JEL-codes: D51 D63 D91 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2018-12, Revised 2018-12
New Economics Papers: this item is included in nep-int
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Published in SDE Series, December 2018, pages 1-59
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http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2018-19.pdf First version, 2018 (application/pdf)
Working Paper: On the General Impossibility of Persistent Unequal Exchange Free Trade Equilibria in the Pre-industrial World Economy (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2018-19
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